Pocket finances. Tax return: practical guide.

Filling your tax return is one of those tasks we tend to dread and fear in equal measure. I believe that aversion comes mostly from not understanding it (and, let’s admit it, also the fear of having to pay). As with many other topics, it’s the confusion that truly scares us.

In this post, I explain everything I know in a simple, clear way so you can file your return without fear. Plus, if you’re renting out a property, I’ll tell you exactly what to keep in mind. Keep reading—together we’ll chase away fear with its greatest enemy: information.

It’s not your salary that makes you rich, it’s your spending habits.

Charles A. Jaffe

The Basics

If you haven’t sold or bought anything major and don’t have significant investments, filing your return will be relatively simple.

• Salaried workers: Your employer should have given you your IRPF withholding certificate (Spanish income tax) at the beginning of the year. There you’ll see:
  • Total gross income
  • Total withholdings applied
    ➔ If you worked for more than one company, you’ll need a certificate from each.
• Other basic aspects you should go through:
  • Union dues (box 0015)
  • Professional association fees (box 0016) – only if membership is mandatory in your case.
  • Donations to NGOs (box 0707) – 80% deduction for the first €150, and 35% for the remainder.
  • Prize money from contests or bank referral campaigns (automatically included if the bank is Spanish). Now I’ll explain what to do if the bank is foreign, like Trade Bank , which I mentioned in a previous finance post.

👉🏼 If you have all this ready, in most cases you’ll be able to file your return without issues.

Advanced Options

Just like when we explore advanced settings on a computer, here are a few next-level tax items:

• Money in foreign banks
  • If you have under €50,000:
    You don’t need to file Form 720, but you do need to declare the interest earned (box 0029).
  • If you have If you have over €50,000:
    You must file Form 720 before March (in addition to reporting the interest on your tax return).
• Money in Spanish banks
  • The tax agency usually already has this interest information pre-filled (Box 0029), along with any withholding tax applied.
  • Even so, always double-check that everything is accurate.
• If you have a Rental PropertyThis one has more layers, so let’s break it down carefully.

Wealth consists much more in enjoyment than in possession.

Aristotle

Feeling lost? Stay with me...

Here comes the clarity. This was something that really intimidated me my first year too. I thought it was super complicated. I’ll share everything I know here, but it’s also worth noting that you can book a phone appointment with the Spanish tax agency, and they’re very helpful.

The short summary: If you rent out a property, you need to declare income and expenses.Income is the total paid by your tenants throughout the year. In my case, it’s monthly rent × 12 months.Deductible expenses are where things get interesting. truco del almendruco.

These are all the expenses you can deduct, as they are necessary for generating rental income:

Those last two are my little hidden gems—I just discovered them recently and they could save you hundreds of euros on your return.

See you soon and happy reading!